Walmart antes stake in Chinese ecommerce business to more than half; outlines new Sustainability plans
Home Accents Today Staff -- Home Textiles Today, October 30, 2012
Bentonville, Ark. - Walmart has increased its investment in the holding company of Yihaodian, a rapidly-growing e-commerce business in China, bringing the retailer's total ownership stake to 51%.
Walmart, which completed the investment, said this additional investment "will help Yihaodian continue its growth, and better positions Walmart to serve Chinese customers through e-commerce." The move is part of Walmart's broader and aggressive effort to ramp up its ecommerce capabilities and reach worldwide - an initiative the company discussed during its 19th annual Meeting for theInvestment Community held in early October.
Launched in July 2008, Yihaodian has been growing "at a rapid pace together with the e-commerce market of China," which Walmart said is expected to be nearly as large as the U.S. e-commerce market by 2016. Yihaodian currently has 24 million registered users, and offers same-day delivery to customers in Beijing, Guangzhou and Shanghai, and next-day delivery to customers in over 100 cities in China.
Neil Ashe, president and ceo of Walmart Global eCommerce, said the investment helps Walmart "further deliver" on its "mission to help customers in China save money and live better. China represents a very important part of Walmart's global investment in e-commerce, and we appreciate the strong support and cooperation we received from the Chinese government. This investment demonstrates we are committed to the development of e-commerce in China and bringing the best possible shopping experience to Chinese customers."
Ashe said that together, Walmart and Yihaodian "will focus on serving an emerging middle class in China. Yihaodian will gain access to cutting-edge capabilities and technology from Walmart that can be offered to customers in China, and Yihaodian will offer expertise and capabilities that benefit our other businesses and customers worldwide."
Added Yihaodian co-founder and chairman Gang Yu: "Our highly competitive supply chain management systems and extensive operational experience have given us an edge in the market here in China. We believe that through our strategic relationship with Walmart, we will be able to leverage their deep insights and significant expertise to further advance our network and excel even more rapidly, ultimately providing a superb experience for our customers."
In other news related to its business in China, Walmart has announced a series of initiatives to make the company's supply chain in the United States, China, and around the world more sustainable.
At an event in Beijing with government officials, nongovernmental organizations (NGOs), academics, suppliers and company associates, Walmart said the company will use the Sustainability Index to design more sustainable products, make its global supply chain more socially and environmentally accountable and responsible, and incentivize merchants to make sustainability a bigger part of their day-to-day jobs.
"Today I'm proud to announce a series of steps and commitments that will make Walmart's supply chain, in the United States, here in China, and around the world, more sustainable," said Mike Duke, president and ceo, Wal-Mart Stores Inc. "The impact of these commitments will be global and make a difference with products sold around the globe."
The commitments that were outlined include:
--By the end of 2017, Walmart will buy 70% of the goods it sells in U.S. stores and in U.S. Sam's Clubs only from suppliers in the United States, China, and around the world who use the Index to evaluate and share the sustainability of their products. This change will involve suppliers who produce goods in categories where the Index is available;
--Beginning in 2013, Walmart will use the Sustainability Index to influence the design of its U.S. private brand products;
--Walmart will change the way its key global sourcing merchants are evaluated so that sustainability becomes an even more important part of buyers' day-to-day jobs. Beginning in 2013, these buyers will join key buyers in Walmart U.S. and Sam's Club who already have specific sustainability objectives on their annual evaluations;
--The Walmart Foundation will grant $2 million to fund The Sustainability Consortium (TSC) and assist in its efforts in launching TSC in China. Using the Walmart Foundation grant, TSC China will engage industries, universities and other experts to form a global network of leaders improving sustainability in consumer goods, and will provide tools and resources to help suppliers become more sustainable and competitive. Walmart will use the results of TSC's independent work to refine its Sustainability Index for use in China.
"The $2 million grant from the Walmart Foundation will support the Consortium and position us to help bring the best science and research to support the development of the green supply chain here in China and globally," said Kara Hurst, ceo of The Sustainability Consortium.
Mednick Talks to HTT about Online Trends for Textiles